Optimal Inventory Policies for a Stochastic Inventory Model with Capital Investment

Authors

  • Jhuma Bhowmick

DOI:

https://doi.org/10.33516/rb.v44i1.93-104p

Keywords:

Stochastic Demand, Random Yield, Random Lead Time, Logarithmic Investment Cost Function.

Abstract

In this paper, a continuous review stochastic inventory model is developed with random yield. The lead time demand and lead time both are considered as random variables and are assumed to follow normal distributions. Shortages occurring in the model are partially backlogged and the backorder rate is a nonlinear function of expected shortage amount. Backorder price discount is considered as a decision variable in this model. The advantages of capital investment are analyzed in the model for reducing the set-up cost and yield randomness. The optimal ordering policies are determined which minimize the expected total annual cost of the proposed model. The model is further illustrated with the help of numerical examples and graphs.

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Published

2018-04-01

How to Cite

Bhowmick, J. (2018). Optimal Inventory Policies for a Stochastic Inventory Model with Capital Investment. Research Bulletin, 44(1), 93–104. https://doi.org/10.33516/rb.v44i1.93-104p

Issue

Volume 44, Issue 1, April 2018

Section

Articles
Crossref
Scopus
Google Scholar
Europe PMC

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